Metropolitan Bank Holding Corp. Q4 FY2025 earnings call

• In 2025, loan portfolio expanded by $775 million (13%) and deposits grew by $1.4 billion (23%). Total loan originations in 2025 were ~$1.9 billion.
• Fourth quarter saw a full-service branch opened in Lakewood, New Jersey; expected to open two new branches in Florida in 2026.
• Asset quality remained solid with no broad-based negative trends.
• 2026 strategy focuses on capturing market share, new initiatives for low-cost deposits and fee income growth.
• On the balance sheet, loan book grew $776 million in 2025, fourth quarter loan growth limited by prepayments. Fourth quarter total originations and draws ~$599 million with weighted average coupon net of fees 7.28%.
• Deposit growth in fourth quarter $34 million, cost of interest-bearing deposits declined 43 basis points quarter over quarter.
• Net interest income in fourth quarter $85.3 million, up over 10% linked quarter and ~20% year over year.
• Noninterest expense in fourth quarter $44.4 million, down $1.4 million vs prior quarter, with movements in comp and benefits, professional fees, and technology costs.

In 2025, the loan portfolio expanded by $775 million, a growth of nearly 13%, with total loan originations reaching approximately $1.9 billion. Deposits increased by roughly $1.4 billion or about 23% in 2025. In the fourth quarter, the loan book was essentially flat due to prepayments of approximately $317 million, while deposits grew by $34 million or approximately 4.3%. The loan portfolio growth was funded by deposits. The loan book had a weighted average coupon net of fees of 7.28% in the fourth quarter's total originations and draws, with a new volume origination mix of about 70% fixed and 30% float. Over the next six months, there was about $1.1 billion in inventories with a WACC of 6.94%, and it was assumed about 75% to 80% of those cash flows would be retained.

• Expect loan growth in 2026 of about $800 million or approximately 12%.
• NIM expected to expand modestly in 2026, with the number and timing of rate cuts being a primary driver. Annual NIM expected to be about 4.1%.
• Non-interest income expected to grow 5% to 10%.
• Operating expenses expected to total $189 million to $191 million in 2026.
• ROTCE expected to approach 16% by 2026.
• Modern Banking in Motion project has $3 million first-quarter spend related to conversion timeline extension. Expansion of real estate footprint in NYC and Florida with associated new expense run rate ~$2.2 million annually, with $1 million increase in 2026. Growth in deposit verticals with annual run rate increase of ~$6 million in 2026.

• Final disposition of certain credits booked specific reserves in 2025 could result in allowance adjustments outside of business-as-usual planning.
• Digital transformation project has timing uncertainties as conversion is anticipated in first quarter but there may be trailing expenses.

Q: Feddie Strickland with Hovde Group asked about loan mix, C&I growth, CRE concentrations, and branch contribution to municipal deposit growth.

A: Mark DeFazio responded on C&I growth and CRE concentration stability, and on branch contribution.

Q: David Conrad of KBW asked about asset quality and capital CET1 ratio.

A: Mark DeFazio talked about asset quality loan workouts and Daniel Dougherty discussed capital targets.

Q: Mark Fitzgibbon with Piper Sandler asked about digital transformation cost completion, interest recovery, deposit growth verticals, and M&A possibility.

A: Daniel Dougherty answered on digital transformation timing, no interest recovery, deposit growth verticals, and M&A stance.

Q: Feddie Strickland followed up on overall growth strategy.

A: Mark DeFazio responded on growth strategy and team lift outs